Kingfisher Airlines (KFA) will stay grounded and may lose its winter vacation business as the management yesterday announced its decision to extend the lockout--declared on October 1--at the company until October 20.

KFA chief executive officer Sanjay Agarwal who led yesterday's negotiations with the striking engineers, pilots and ground staff said the management was constrained to put off resumption of flights on account of continuing labour problem.

He, however, described the first ever official talks with the employees as "positive" since the strikers have agreed to another round of talks to break a prolonged impasse over the payment of seven months' salary dues.

In the first week of October, the 17 lenders led by State Bank of India released 60 crore rupees from escrow account to facilitate settlement of salary dues. (One crore is equivalent to 10 million)

Representatives of the striking employees, however, felt dismayed by yesterday's talks as they failed to secure a specific assurance from the management on payment of salary dues. One of the participants said KFA has offered one month's salary as an incentive to resume duties while the demand is for the clearance of all pending dues. The next round of talks, both sides agree, will be crucial.

Yesterday's meeting was at the behest of the KFA vice president Hitesh Patel who had sent e-mails on Sunday inviting the strikers for discussion at the airline's headquarters in Mumbai. From Monday the talks were postponed to Wednesday.

A consensus seems to be emerging over the urgency to end the deadlock soon. The semblance of success claimed by the management at the talks was mainly because of the presence of some top executives of UB Group who are experienced enough to handle workers' unrest.

Although KFA has not identified them it is understood the chairman, Vijay Mallya, sought negotiation skills of Subhash Gupte and SD Lalla.

The strikers are also worried about the show-cause notice served by the regulator--Director General of Civil Aviation (DGCA)--threatening to revoke KFA's flying licence if a satisfactory reply was not received by October 20. The management is likely to seek a future date to comply with the notice.

Kingfisher Airline's winter schedule which for any carrier is the busiest and lucrative is yet to be cleared by the DGCA and aviation ministry. And it will not be unless the management presents a comprehensive revival schedule along with a reply to the show-cause notice. Although KFA was launched in 2005, it inherited flying licence from the purchase of Air Deccan by UB Group in 2003.

The private carrier facing enormous liabilities of 15,000 crore rupees--debts and piled up losses since 2005--declared a lockout on October 1 which was to be lifted on October 20.

Many employees complain of receiving notices from the Income Tax Department asking them to file mandatory returns.

The staff say they could not file returns because the management has not sent them Form 16. KFA failed to dispatch Form 16 because it failed to deposit TDS amount for want of sufficient revenue.

KFA has been urging the IT, Central Excise and other government agencies to lift the ban on the operation of its bank accounts.